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Ed Davey talks about Energy Bill on the Today Programme: Transcript

23 Nov 2012, 15:30

Freya Roberts

Ed Davey explained what's in - and not in - the government's new
energy bill on this morning's BBC Radio 4 Today Programme. Some of
the finer details of the bill are also available in a
statement by the Department of Energy & Climate Change. Our
look at the media coverage of the announcement is here.

Below is a transcript in full of the interview between the host,
Evan Davies, and the Energy Secretary, Ed Davey, which begins 2
hours and 11 minutes into the
recording:

Ed Davey on the Today Programme

Davies: The big issue for most people clearly is
their bill and I do want to talk about that in a moment because it
is going to have implications for that. But lets just get some
clarity first over what our energy future is, because we seem to be
stuck in paralysis between a vision of sort of gas fuelled
electricity sector and a perhaps more expensive but less emitting
renewable and nuclear electricity future and i'm not clear we've
really made up our mind about which way it is to be yet, are you
clear about which we're going down, which route?

Davey: Absolutely, I don't think it's gas or
renewables, I think you need both, and actually they can be very
complimentary. Some of the renewables like wind and solar - wind
doesn't always blow and the sun doesn't always shine, so you do
need other types of energy generation. And therefore the mix is
what's important, and having a diverse and balanced approach where
you're not just putting all your eggs in one basket is the best way
to: a) keep the lights on so you've got more security, and b) make
sure you get the best prices.

Davies: Right, but just to be one hundred per
cent clear, everybody's always accepted we're going to have gas
there for standby for when the wind isn't blowing if we're using a
lot of wind, but you're saying gas will play a part on top of that?
a significant part in electricity in 2030 on top of any need to be
just sort of reserve power in the background?

Davey: We've always said that, when Chris Huhne
published the Carbon Plan to try to reduce our carbon emissions
there was a clear part of the modelling which showed we'd need a
lot more new unabated gas plants over the next two decades.

Davies: And we're going to get a gas strategy or
a statement in the next couple of weeks as well aren't we? Is that
going to sort of open the door to fracking, to finding the gas
reserves under Blackpool and pulling them out of the ground?

Davey: Well I have to make a decision about
whether Cuadrilla can continue its fracking there, and that's a
sort of quite a judicial decision, and i'll be making that shortly.
But i've been very clear and the chancellor's been very clear that
shale gas does offer an opportunity to the United Kingdom.

Davies: Are we still entirely committed to the
2050 target, so the 80 per cent reduction on carbon emissions by
2050?

Davey: Yes, totally.

Davies: There's no target for 2030 as I
understand it. Now the worry that some people have, and indeed it
seems the Committee on Climate Change who are the official advisers
on this appear to have a bit of a worry about this, is that if you
don't have a target for 2030, you don't meet the target in
2050.

Davey: I think you're muddling up targets, there
is a target for carbon emission reduction and we will have one for
2030. We've got currently four carbon budgets going up to 2027 and
they show how the whole economy should reduce its emissions so we
aren't polluting as much. There will be a fifth carbon budget which
will cover the period 2028-2033, published in 2016 and at that time
there'll be another target for the power sector, just the power
sector.

Davies: But it's the power sector one everyone
was saying you needed to hit by 2030, you almost needed to
decarbonise the electricity sector by 2030 to be on course to meet
the big one, the 2050 one, right, and that's the one you wanted and
you had a big argument with the Chancellor about and you lost that
argument.

Davey: Well I wouldn't characterise like that -
we had a good negotiation and I think it's really important that
two parties have come together and will be delivering the biggest
boost to clean energy - we're doing it and labour failed as one
party. But on the decarbonisation issue, lets be clear - we've
agreed that we'll take a power in the energy bill so that the
Secretary of State can set a decarbonisation target for 2030. That
will help make sure we give confidence to investors, but we're
going to set that target, not now, but in 2016.

Davies: After the election, basically?

Davey: Yes, but when we set the carbon budget
which will cover the same period.

Davies: But it's the election that's the crucial
thing there, isn't it. Because you're going to go into the
election, and probably actually labour will too, according to Ed
Miliband yesterday - you'll both go into the election saying we
want a decarbonised... basically decarbonised the power sector by
2030. We get rid of all the carbon, its basically nuclear,
renewable and gas in the background. That's what you'll go into the
election promising, no?

Davey: Well I can't actually write the Liberal
Democrat manifesto now but we do have policy passed this autumn
which would commit the Liberal Democrats to a 2030 decarbonisation
target. That would include all low carbon by the way - nuclear, CCS
and all forms of renewables.

Davies: Indeed so. If I want to build a gas fired
power station now, that's going to last 25 years, can I do that
knowing it will be allowed to operate until 2040?

Davey: Yes.

Davies: So it will be allowed to operate until
2040? Even though...

Davey: Yes, that's always been the case. This is
all about jobs, you know, we are going to see a massive increase in
investment in clean energy and in gas, and in other parts of energy
infrastructure - that's exactly what industry's been wanting, it's
actually what the green groups want as well, and this decision
today actually is going to unlock and unblock massive investment
and jobs.

Davies: But the green groups are not as happy as
you're suggesting, because you're suggesting it's all love and
peace, and you're suggesting it's always been inevitable that it
was going to be rough like this and this is what you wanted. But of
course it isn't what you wanted, it isn't what your party wanted,
it's not what your party suggested it wanted at its own conference,
and there isn't a target for 2030 - that's delayed until after the
election. Just to be quite clear about it.

Davey: Well, we've got a power for a
decarbonisation target. We've got a huge amount of money that's
going to go into clean energy, the investors and industry have been
asking for this, and actually I think...

Davies: We've got some clarity, but not until
after the election...

Davey: They've got a lot of clarity because we've
got the carbon budgets already, we've got the Climate Change Act
already. And what the green groups I think will see when they look
at more of this detail is that this is a once in a generation
change to our energy infrastructure, moving away from dependence on
fossil fuels which you have to import from the other side of the
world at increasingly high cost, so we go to low carbon and clean
energy.

Davies: Reducing, but not eliminating. Right, I
want to move on to bills very quickly because of course there are
implications for bills and there are a lot of different figures
being bandied around. We've got 7.6 billion being committed, per
year, to expensive green energy by 2020. What do you think is going
to be the implication of your energy bill for the average
household?

Davey: At the moment, the biggest impact impact
on energy bills is of course gas imports, its also the renewal of
the transmission system. Much of the impact from government
policies is actually on energy efficiency and on tackling fuel
poverty. The impact from supporting clean technology is only 2% on
people's bills at the moment. By the end of the decade that will
grow, and by 2020 it'll be about 7%...

Davies: In today's money, does 7%... we're
talking then about £170?

Davey: No, no we're not. Absolutely not. We're
talking about under £100 in 2020. In 2012, today, we're talking
just £20. The figures that are being bandied about are just, utter,
rubbish. And if you take account of all our policies, which I think
when you're talking about energy you should look at all aspects of
the energy policy, and we are making measures on energy efficiency
which will help people save money. If you look at our reforms of
tariffs that I announced, that will help many people save money.
And if you look at the net impact, which I know you as an
economist, Evan, would want to look at, the net impact by 2020, the
average saving for people will be £94. So actually rather than
increasing bills, our green energy policies are going to reduce
bills.

Davies: Just to get a figure for the green power
surcharge, so to speak, the 7.6 billion translates into an amount
below £100, per household, you say.